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The 2000 Provincial Budget Address
Presented May 23, 2000
See also original March 17 address
MADAM SPEAKER, Members of the Legislative Assembly,
I am once again privileged to present to this Assembly and to the people of
Prince Edward Island the Estimates of Revenue and Expenditure for the fiscal
year 2000-2001.
This Budget is essentially the same Budget I presented to this Legislature on
March 17, 2000. This Budget has been updated, however, to reflect the May 1,
2000 restructuring of Government; a change to federal equalization; and new
information obtained relating to Corporate Income Tax Assessments.
I want to emphasize that the surplus for 2000-2001 still remains at $219,300 and
the forecast surplus for 1999-2000 still remains at approximately $4 million.
All Policy issues announced on March 17, 2000 still exist and are built within
this Budget.
Madam Speaker, I wish to explain the adjustments that have been made to this
Budget which are on page 8 of the Estimates Book.
Subsequent to the delivery of the Budget of March 17, 2000, the Province
received information concerning equalization for prior years, providing a
positive adjustment of $11.5 million. This adjustment is reflected in the
forecast revenues for 1999-2000 under equalization adjustments, shown on pages
10 and 18 of the Estimates Book. Equalization for March 31, 2000 is now
recorded at $255.9 million, compared to the $244.4 million as stated in the
March 17, 2000 Estimates Book.
The forecast expenditures for March 31, 2000 have also increased by $11.5
million to reflect a special warrant to Prince Edward Island Business
Development Inc. of $494,000 and additional payments of $11 million to the
Special Project Funds.
I want to reference the 2000-2001 fiscal year. The Corporate Income Tax
estimate has been revised upward as a result of information recently obtained
relating to Corporate Income Tax Assessments. The budget estimates of the
Prince Edward Island Business Development Inc. have been increased by $7 million
which is the result of an adjustment relating to a legal commitment under the
Tax Rebate Agreement. This adjustment to the 2000-2001 Budget Estimates has no
net effect on either the budgeted surplus of $219,300 or the change in net debt.
Madam Speaker, I want to stress once more that the Budget I am presenting to the
Legislature today is the same as that of March 17, 2000 with the surplus for
both the forecast 1999-2000 and Estimates of 2000-2001 remaining the same.
I wish to emphasize that the Budget Address of March 17th. and the Budget
Highlights also issued on March 17th. are integral parts of this Budget being
introduced today and each document remains unchanged.
Madam Speaker, as I stated in the Budget Address of March 17th., I feel
Islanders have a great deal of which to be proud. Our fiscal and economic
performance exceeded expectations and in many instances the results have been
outstanding: International exports increased 18.8 percent, housing starts were
up 17.6 percent, we led the country with a 9.8 percent increase in retail sales,
expenditures by tourists topped $303 million, the value of lobster landings
increased to $88.8 million, farm cash receipts grew by 10.5 percent and
employment in April, 2000 reached 65,700. Prince Edward Island led the nation
in employment growth since September 1999. Projections point to continued
growth this year in the national and provincial economy.
Madam Speaker, this growth, combined with solid fiscal management, has benefited
the Island's financial picture. For the first time in 25 years we have achieved
back-to-back surplus budgets. All Islanders share in this success, and by
improved programs, a stronger economy, and reduced taxes, all Islanders will
share in the benefits.
The May 11th. Speech from the Throne reaffirmed the commitments made in the
Budget of March 17th., and I will take a few minutes to reaffirm some of those
highlights which demonstrate significant increases in expenditures in priority
areas.
In Health Care:
The Enhanced Physician Recruitment Strategy and the new Nurse Recruitment
Strategy have been announced in detail; the subsidy rate for nursing homes will
be increased; the Comfort Allowance improved, Community Care facilities will
receive increased financial support; funding of $250,000 has been allocated for
a new Provincial Children's Mental Health team; $250,000 for volunteer
organizations involved in health services and education; and a further $1
million to improve Social Assistance. Funding has also been provided to
purchase a Magnetic Resonance Imaging Unit (MRI); to add a Linear Accelerator to
the Cancer Treatment Centre, and to support the equipment fund for the new
Prince County Hospital.
In Education:
Work is already underway on the implementation of the publicly-funded
kindergarten system; the West Royalty School is open, and the site work is
beginning for the Fort Augustus School. Funding for Elementary and Secondary
education will increase by $3 million to provide new supports in 11 priority
areas. Those areas include: new math curriculum, French First Language
schooling, special-needs students, Technology, Teacher Assistants, and in-
service training.
At the Post Secondary level, funding for UPEI and Holland College will receive
increased operating grants totalling more than $2 million, the student financial
support program will be enhanced by $1.3 million, and the Province will
contribute $1 million towards the construction of a new Student Centre at UPEI.
At the Community Level:
This Budget allocates $2.5 million for a new infrastructure program in
partnership with the Federal and Municipal governments; $350,000 for increased
policing services; free motor vehicle registration for volunteer firefighters,
and the operation of 911. Funding has been allocated in support of the
announced Seed Potato Strategy, the Agriculture and Environmental Resource
Conservation Program, increased tree-seedling production, and a reduction of
taxes paid on farmland rented to bonafide farmers. Work will begin on the
Lobster Strategy, job creation initiatives will be supported, $140,000 provided
for Community Access program training, the Confederation Trail will be
completed, and Small Business supported.
Madam Speaker, we are committed to a balanced approach, and I am pleased to
again highlight the tax reductions involved in this Budget.
The Provincial Personal Income Tax rate will be reduced again by one percentage
point to 57.5 percent. This represents a $2.2 million tax break for Islanders.
The Government will pass through in full the additional provincial reductions
resulting from federal tax changes. This represents a further tax cut of $7
million for Island taxpayers.
In addition, the Low Income Tax Reduction Program we are implementing will
reduce taxes by $3 million for 17,200 Island individuals and families, and in
fact, will eliminate Provincial Income Tax for an estimated 4,860 low-income tax
payers.
Combined with Federal reductions, total savings to Islanders will be more than
$24 million this year, and when added to reductions announced last year,
represent a total tax reduction of more than $41 million.
Madam Speaker, I believe we are starting the new millennium on the right foot.
We are taking a balanced, responsible approach, reflecting the need for vital
programs, reducing taxes, and exercising prudent financial management.
I believe the evidence is clear - the approach is working - let's continue.
Thank you, Madam Speaker.